Why I Ditched Using Technical Indicators?
Yes, you read the headline correctly, here I will tell you the reasons why I jettisoned the use of technical indicators as a trader. No, we are not saying that you should do the same. But as a beginner trader, you need to know this.
The reasons I'm going to give here will help you decide if technical indicators are useful or not. For some traders, they still work and will continue to do so. But for some traders, technical indicators are useless. Don't believe it, then you must read this post till the end and you will find that your perception about technical indicators will change.
Anyway, if technical indicators are working for you, then cheers. You are on the right track with technical indicators. If they work for you, then you should stick with them. But if you are just ready to start with them, then read the post and make up your mind.
10 Reasons Why Technical Indicators Are Not Useful
Without being technical, some psychological and economic factors have encouraged me to stop using technical indicators. Perhaps there are some technical reasons as well. The list of reasons can be long. But to keep it short and useful for you, I have added ten of them.
These ten reasons will help you understand why technical indicators are not useful. But I mention again that we are not discouraging anyone from using technical indicators. If a trader gets any benefit from it. Then he/she must continue to use them, no doubt. But if you are still analyzing their benefits. Then you need to go through these ten reasons.
#1. It Is Not The Main Force
The first thing you need to keep in mind is that there are driving forces in the market. No matter what market you belong to. Whether it's a forex trading market or a stock trading market. There are some forces and technical indicators are not the only force.
Some traders out there think that the technical indicator they are using is the main force. They think that the entire market moves with their chosen technical indicator. But that is not the truth. So never rely on a single trading indicator.
#2. False Signals
It often happens that you are given wrong signals by technical analysis. Who is responsible for this? Most likely, you used the wrong technical indicators or your technical indicators gave you wrong signals. But this is one of the main problems traders have with technical analysis and indicators.
Technical indicators are hard to understand and use for beginners. So you need to practice more to move up from beginner to advanced and use technical indicators.
Sometimes even experienced traders find it difficult to understand some technical indicators. What can you expect from a technical indicator that is hard for you to understand? You need something that is easy for you to understand.
#4. Psychology Matters More
We have mentioned the driving forces of the market. There are many driving forces. Some experienced traders call them market driving factors. Psychology is one of those factors. Sometimes you will find that psychology is more important than technical indicators. That is why some traders do not use technical indicators because they use psychology.
#5. Keep It Simple
Technical indicators will complicate things differently. There are many factors in the market and if you consider all of them, you will observe something special. You will notice that technical indicators will complicate things more compared to other signals.
Sometimes even simple things are treated as complicated by the indicator. We don't need such analysis that overcomplicates things. Sometimes it is useful to keep things as simple as possible.
#6. They Depend Upon The Environment
Technical indicators depend on the market environment. This means that they will show the results according to the current market environment. So there is no market research at a deep level.
However, it doesn't always happen in the market. But most of the time it happens and you don't get the actual situation and results through the technical indicators.
#7. Accuracy Matters In Trading
As traders, we are more concerned about accuracy. And most of us know that accuracy is not taken seriously by some technical indicators. Not only a few technical indicators but majority of them don't have that level of accuracy.
Without accuracy, you can't predict the market or the movement of an asset. This makes it more complex for beginners to trade profitably.
#8. Being More Technical Is Harmful
Psychology is sometimes more important than technology. We mention this statement more than once in this post. Because it is the reality of the current market. A few decades ago, technical things were the only factors that affected the market. But nowadays, many factors affect the market.
So sometimes it's harmful to look at the market more technically. And with technical indicators, most traders become completely technical while taking trading actions. So it is important to stop using technical indicators and use other indicators in the market.
#9. A Little Bit Perfection Is Required
There is no perfection in every action you take in the trading market. But when it comes to technical indicators, you need to be perfect. We know that no trader can be perfect. But still, you need to work hard so that your actions become more accurate. Because technical analysis and technical indicators require you to be more perfect.
And if you feel that you can't fit into such a narrow technical-oriented trade, then you should stop using technical indicators. You should find new ways in the market.
#10. Retail Traders Take Less Benefit
Technical analysis is made for the big bulls in the market. From hedge fund firms to top banks and financial institutions, they all take advantage of it. However, it cannot be officially proven to be true. But the entire global market firmly believes it.
It is said that small traders have less control in the market and technical analysis is not profitable for them. The big bulls of the market use technical analysis as their tool to take all the benefits.
So What You Should Do?
Now the question is what should you do with technical indicators? What should be your next step as a trader? Should you use them or leave the idea of using them?
Well, it all depends on your experience, trading approach and vision. If you think you can be successful with technical indicators, then you should start using them. However, if it sounds complex to you, then you can avoid it.
Many traders do not use technical indicators and many traders have stopped using technical indicators. The reasons for this can be different for every trader. But we have shared with you the top ten reasons for avoiding technical indicators.
However, this does not mean that technical indicators do not work in the market. They do work and many traders use them for their profit. Moreover, you can try them yourself and see if they work for you or not. After you have the results in hand, you can make the final decision.
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